Benn against the big bad Wolfowitz

Ignore UK development minister Hilary Benn's posturing against the World Bank: both agree that Africa is incapable of self-government.

Tara McCormack

Topics Politics

In September, Hilary Benn, the UK international development secretary, announced on BBC Radio 4’s Today programme that his Department for International Development (DfID) would consider withholding £50million of Britain’s pledged £1.43billion contribution to the World Bank for development purposes. Benn told Paul Wolfowitz, president of the World Bank, that Britain is unhappy about the lack of progress in removing conditions that tie onerous strings to financial help for developing nations (1), and that the World Bank and the International Monetary Fund (IMF) should not impose conditions on loans that force countries to adopt particular economic policies (2).

For those who support the right of countries to self-government, this might seem like a welcome policy from Britain. During the 1980s and early 1990s the World Bank and the IMF were criticised for the economic conditions attached to loans to developing countries. Under this regime, economic policy for many countries was effectively dictated by the big international institutions, regardless of the impact on or the needs of the actual populations. In order to receive loans, countries were forced to adopt harsh economic policies, such as privatising state industry, and slashing state spending. These policies, termed ‘structural adjustment policies’, were understood to be motivated by a neo-liberal anti-state agenda which believed that the key to growth and economic success lay in reducing the state, and privatising as much of the economy as possible.

However, since the late 1990s the World Bank and the IMF have transformed both their policies and their relationships with debtor countries. This relationship has been reconfigured under the aegis of ‘Poverty Reduction Strategies’ (PRS), which were agreed in 1999 between the World Bank and the IMF. While structural adjustment entailed the external imposition of economic policies on developing states, the relationships at the heart of the PRS process are seen to be consensual, and matters of partnership, in which ‘country ownership’ – that is, giving control to the country – is paramount (3).

Rather than the ruthless privatisation and other economic policies that had a devastating effect in many countries, especially on the poorest, PRS aim to place the needs of the poorest of the population at the centre of concern. Economic policy itself, as a condition of aid, is no longer the priority, and the focus is on the capacity of developing states and state institutions to ‘deliver’ development and security for their citizens (4). Matters of governance, and related issues such as state capacity and corruption, are held to be key to the reduction of poverty and the development of countries.

Under New Labour, Britain has wholeheartedly adopted this approach. The International Development Act of 2002 made it illegal for British aid to be used for anything other than the purposes of ‘poverty reduction’ (5). Since then DfID has made a point of urging the World Bank and the IMF to do more to de-link any conditions from economic policies in states (6). Benn has urged the international financial institutions to concentrate far more on what are the key barriers to the reduction of poverty – bad governance and corruption, ‘very simply because without good governance, and unless we beat corruption, we will never defeat poverty’, he argues (7).

Wolfowitz has stated that he does not understand the difference that Benn is attempting to draw between British policy and the World Bank. Rather, the World Bank agreed with Benn over the errors of past stringent conditions attached to loans: ‘On the question of the governance and anti-corruption strategy, I frankly don’t see a difference. I think we both agree that the approach here is that governance is very important, that tackling corruption is very important, that the way you do it is not by punishing and withholding money.’ (8) Indeed, issues of corruption and governance have been at the forefront of this month’s annual meeting of the World Bank and IMF in Singapore (9), as they were at last year’s meeting of the G8 in Gleneagles, and in the report issued by the UN Millennium Project (10), which overviews implementation of the Millennium Development Goals (11).

What then is Benn’s beef with the World Bank and the IMF? Despite the high-profile discussion of country ownership, under the new relationship between countries and the international donor institutions the international community has become integrated into the very domestic governing structures of the state in ways which are far more intrusive and controlling than the old external diktat of the World Bank and the IMF, in which the exercise of power and enforcement was at least clear. Under the new system, the international donor institutions become part of the very domestic policymaking process (12). The focus on governance and corruption simply entrenches this even further (13). Benn is not arguing for meaningful control to be given back to countries. If anything, by urging the IMF and the World Bank to abandon any economic conditionalities, he is urging the international community to entrench policies that will lead to even greater control.

This is a particularly shameless example of the British government using international aid policy as a platform on which to assert some moral authority. Clearly there are no substantive differences in policy between DfID and the World Bank/IMF. Moreover, withholding £50million out of £1.43billion can be only a symbolic gesture, without the intention of having any real effect. Benn is simply trying to grab some cheap and easy headlines by scoring points against everyone’s favourite bogeymen, the World Bank and the IMF.

While apparently standing up for the self-government of developing nations, Benn is actually pushing forward policies that can only lessen the possibilities for developing societies ever to have any kind of self-government.

(1) Britain issues World Bank £50m ultimatum, Guardian, 14 September 2006

(2) see statement on the DfID website

(3) see DfID, ‘Partnerships for Poverty Reduction: Rethinking Conditionality: A UK Policy Paper’, May 2005

(4) see Pender, John (forthcoming 2006), ‘Country Ownership: The Evasion of Donor Accountability’, in, Bickerton, C, Cunliffe, P, Gourevitch, A, Politics Without Sovereignty, A Critique of Contemporary International Relations

(5) see DfID, ‘Partnerships for Poverty Reduction: Rethinking Conditionality: A UK Policy Paper’, May 2005

(6) ibid, p13 – 14

(7) Speech given by Hilary Benn to Transparency International, Improving Governance, Fighting Corruption, 14th September 2006

(8) No rift with Britain, says World Bank chief, Larry Elliott and John Aglionby, Guardian, 16 September 2006

(9) For Poverty to be History, Corruption Must Be History, World Bank

(10) UN Millennium Project, 2005, Investing in Development: A Practical Plan to Achieve the Millennium Development Goals

(11) Make lecturing Africa history, by David Chandler

(12) Africa: ‘Empowerment’ by imposition, by David Chandler

(13) Make lecturing Africa history, by David Chandler

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Topics Politics


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